ENTREPRENEURSHIP 11

Relevance of Entrepreneurship to an organization

1. Development of Managerial capabilities- this means that one of the benefits an

entrepreneur gets is to develop his managerial skills.
2. Creation of Organizations- which means that because of entrepreneurships many
organizations will exist.
3. Improving standard of living- this means that entrepreneurship can lift up the
economic status of an individual.
4. Means of economic development- this means that not only the life of the
entrepreneur is improved but also the society where the business is located.

Concept of Entrepreneurship
The word “entrepreneur” was derived from the French verb enterprendre, which
means “ to undertake” This is pinpointing to those who ”undertake” the risk of enterprise.
The enterprise is created by an entrepreneur and the process is called “Entrepreneurship”
Entrepreneurs are innovators, willing to take risks and generate new ideas to make it
unique and profitable solutions to the present-day problems.

Factors Affecting Entrepreneurship

1. Personality Factors which includes:

a. Initiative- which means doing things even before being told
b. Proactive-which means he can classify opportunities and seize it.
c. Problem Solver- which means he can retain good relations with other
people

d. Perseverance-meaning he will pursue things to get done regardless of

challenges
e. Persuasion- means that he can entice people to buy even if they don’t.
f. A Planner- meaning he makes plan before doing things and do not fail to monitor
it.
g. Risk-taker which means that he is willing to gamble but he will calculate it first.

2. Environmental Factors which include political, climate, legal system, economic and
social conditions and market situations.

Common Competencies in Entrepreneurship

1. Decisive- an entrepreneur must be firm in making decisions.

 2. Communicator- an entrepreneur must have a convincing power.
3. Leader-an entrepreneur an entrepreneur must have the charisma to be
obeyed by his employees
4. Opportunity seeker- an entrepreneur must have the ability to be the first to see
business chances.
5. Proactive- controlling a situation by making things to happen or by preparing
for possible future problems.
6. Risk Taker- they have the courage to pursue what is their business ideas.
7. Innovative- the entrepreneurs have big business ideas and they do not stop
improving and thinking of new worthwhile ideas for their business.

Core Competencies in Entrepreneurship

1. Economic and dynamic activity- Entrepreneurship is an economic activity because it

involves the creation and operation of an enterprise with a view to creating value or
wealth by ensuring optimum utilization of limited resources.
2. Innovative- Entrepreneurs constantly look for new ideas, thus he needs to be creative.
3. Profit Potential- meaning the entrepreneur can be compensated by his profit coming
from the operation.
4. Risk bearing –meaning the entrepreneur needs to gamble but wise enough to offset
the risk.
 Types of entrepreneurs

1. Innovative entrepreneur- they are those who always make new things by
thinking of new ideas.
2. Imitating entrepreneurs- they are those who don’t create new things but
only follow the ideas of other entrepreneurs.
3. Fabian entrepreneurs- they are those skeptical. They don’t initiate but
follow only after they are satisfied.
4. Drone entrepreneur- they are those who lives on the labor of others. They
are die-hard conservatives even ready to suffer the loss of business.
5. Social entrepreneurs-they are those who initiate changes in the various
fields such as education, health, human rights, environment and enterprise
development.

Career Opportunities of Entrepreneurship

1. Business Consultant- with the expertise of the entrepreneur he can be a

very good source of advices to other entrepreneurs and would be business
man.
2. Teacher- a graduate of an entrepreneurship can be use his knowledge in
teaching
3. Researcher- the entrepreneur can be employed as researcher by an
enterprise.
4. Sales- the entrepreneurship graduate can apply as salesman
5. Business Reporter- the entrepreneur being expert in the field, he can be
employed as business reporter.

Essentials in Entrepreneur’s Opportunity Seeking

These are the basic foundation that the entrepreneur must have in seeking opportunities:

Entrepreneurial mind frame. This allows the entrepreneur to see things in a very positive and
optimistic way in the midst of difficult situation. Being a risk - taker, an entrepreneur can find
solution when problems arise.

Entrepreneurial heart flame. Entrepreneur's driven passion, they are attracted to discover
satisfaction in the act and process of discovery. Passion is the great desire of an entrepreneur to
achieve his/her goals.

Entrepreneurial gut game. This refers to the ability of the entrepreneur of being intuitive. This
also known as intuition. The gut game also means confidence in one’s self and the firm believes
that everything you aspire can be reached.

Sources of Opportunities
There are many ways to discover opportunities. Looking at the big picture some have noticed the
emerging trends and patterns for business opportunities. While others are trying to find out their
target market. Some are the following sources of opportunities:

1. Changes in the environment

Entrepreneurial ideas arise when changes happen in the external environment. A person with an
entrepreneurial drive views these changes positively. External environment refers to the physical
environment, societal environment, and industry environment where the business operates.

1.1 The physical environment includes

a. Climate- the weather conditions.
b. Natural resources- such as minerals, forests, water, and fertile land that occur in nature and can
be used for economic gain.
c. Wildlife- includes all mammals, birds, reptiles, fish, etc., that live in the wild.
1.2 The Societal environment includes the various forces like
a. Political forces- includes all the laws, rules, and regulations that govern business practices as
well as the permits, approvals, and licenses necessary to operate the business.
b. Economic forces- such as income level and employment rate.
c. Sociocultural forces- customs, lifestyles and values that characterize a society.
d. Technological environment- New inventions and technology innovations.
1.3 The industry environment of the business includes:
a. Competitors
b. Customers
c. Creditors
d. Employees
e. Government
f. Suppliers

For example, one factor in the physical environment that can easily change is the climate. The
temperature is very high during summer but very low during the rainy season. An individual with
entrepreneurial drive can be extremely imaginative and inventive in identifying opportunities.
He/she can venture a business that responds to the needs of the people during summer and rainy
season.
2. Technological discovery and advancement
A person with entrepreneurial interest sees possibility of business opportunities in any new
discovery or because of the use of latest technology.
For example, an individual with knowledge in repair and installation of a machine engine
discovers that additional engine parts that considerably reduce fuel consumption.

3. Government’s thrust, programs, and policies

The priorities, projects, programs, and policies of the government are also good sources of ideas.
For example, the use of firecrackers to celebrate New Year’s Eve is strictly prohibited. People
without entrepreneurial interest will view the ordinance as a plain restriction. However, for an
entrepreneur, it is a business opportunity to come up with a new product that will serve as a
substitute for firecrackers.

4. People’s interest
The interest, hobbies, and preferences of people are rich source of entrepreneurial ideas. Like the
increasing number of Internet Café at present could be lead to the strong attachment of young
people to computers.

5. Past experiences
The expertise and skills developed by a person who has worked in a particular field may lead to
the opening of related business enterprise.
For example an accountant who has learned the appropriate accounting and management skills
and techniques in a prominent accounting firm can start his/her business venture by opening
his/her own accounting firm.

Forces of Competition Model

It is also known as the “five forces of competition,” An industry environment is a competitive

environment. Regardless of what product or services you have, competition is always present.
Competition – it is the act or process of trying to get or win something.
For example, the prices are lower when there is a competition among the
stores.

These are the five forces competing within the industry:

• Buyers
• Potential new entrants
• Rivalry among existing firms
• Substitute products
• Supplier

1. Buyers
The buyers are the one that pays cash in exchange to your goods and services. For example, the
influenced of the price or in the bargaining strategy. The buyer has a strong and magnified
bargaining power. The threat of its bargaining power will be less if the following factors notice:
a. There are several suppliers available in the market.
b. The buyer has the potential for backward integration.
c. The cost of switching the supplier cost is minimal.
d. The product represents a high percentage of the buyer’s cost.
e. The buyer purchases large portions of the seller’s product or services

2. Potential New Entrants

A new entrant is defined as the one who enters something. For example, the level of capital
requirements, if the business requires huge capital, new entrants should decline to join the
business. This gives a threat to the business. This can be notice if there is the presence of the
following factors:
a. Substantial capital requirement.
b. Strict government policy.
c. Difficulty in accessing distribution channels.
d. Economies of scale.
e. High cost of product differentiation.
f. High switching cost

3. Rivalry among Existing Firms

Rivalry is a state or situation in which people or groups are competing with each other. For
example it depends on the Marketing strategy of your competitor, like giving freebies and special
offers. The intensity of rivalry among existing firms is characterized to the following factors:
a. Diversity of rivals.
b. Number of competing firms.
c. Characteristics of the products or services.
d. Increased capacity.
e. Amount of fixed costs.
f. Rate of industry growth.

4. Substitute Products
Substitute means anything that takes the place or function of another. For example the consumers
decide to use margarine as a substitute for butter. In case the price of butter increases, preferably
the consumer will gradually switch to margarine.
A substitute product can give a big threat in the industry environment if the following factors are
notice:
a. Switching cost is low.
b. Preferences and tastes of the customers easily change.
c. Product differentiation is highly noticeable
d. The quality of substitute products dramatically improves.
e. The price of substitute product is substantially lower.

5. Suppliers
The Suppliers are the one that provide something that is needed or wanted. For example if the
supply and services being offered is unstable or keep. The intensity of the threat is strong in this
kind of the competitive force in the industry. This can be notice if there is the presence of the
following factors:
a. The supplier has the ability for forward integration.
b. Suppliers in the industry are few, but the sales volume is high.
c. Substitute products are not readily available in the market
d. The switching cost is very high.
e. The product or service is unique.

Value Proposition (VP) is a business or marketing statement that summarizes why a consumer
should buy a company's product or use its service. This statement is often used to convince a
customer to purchase a particular product or service to add a form of value to their lives.
In creating Value Proposition, entrepreneurs will consider the basic elements:
• Target Customer
• Needs/opportunity
• Name of the product
• Name of the enterprise/company

An important aspect in Value Proposition must be truthful that will establish credibility to the
consumers.

Unique selling proposition (USP) refers to how you sell your product or services to your
customer. You will address the wants and desires of your customers.
As entrepreneur, you think of marketing concept that persuade your target customers. The
following questions you may ask in doing this, What the customers want? What brand does well?
What your competitor does well?

Some tips for the entrepreneur on how to create an effective unique selling proposition to the
target customers:
• Identify and rank the uniqueness of the product or services character
• Very Specific
• Keep it short and simple (KISS)

Unique Value Proposition and Value Proposition are two most famous tools used to explain
why prospect customers buy each products and services. Base on each definition, we learn
that USP and VP are frameworks of each business industry. The two propositions are valuable
for the entrepreneurs.

Customers requirement and market size.

A. Target Market
Market Targeting is a sage in market identification process that aims to determine the buyers
with common needs and characteristics. Prospect customers are market segment that
entrepreneurial venture intends to serve.
In targeting a specific market, it will exclude people even if it will not fit your criteria. Rather,
target marketing allows you to focus your marketing money and brand message on a specific
market that is more likely to buy from you than other markets. Product is more affordable,
efficient, and effective way to reach potential clients and generate business.

Commonly used methods for segmenting the market are follows.

1. Geographic segmentation – the total market is divided according to geographical location.
• Variable to consider
a. Climate
b. Dominant ethnic group
c. Culture
d. Density (either rural or urban)

2. Demographic Segmentation – divided based consumers.

• Variable to consider
a. Gender
b. Age
c. Income
d. Occupation
e. Education
f. Religion
g. Ethnic group
h. Family size

3. Psychological Segmentation- divided in terms for customers think and believe.

• Variable to consider
a. Needs and wants
b. Attitudes
c. Social class
d. Personality traits
e. Knowledge and awareness
f. Brand concept
g. Lifestyle

4. Behavioral Segmentation- divided according to customers behavior pattern as they

interact with a company.
• Variable to consider
a. Perceptions
b. Knowledge
c. Reaction
d. Benefits
e. Loyalty
f. Responses

B. Customer Requirements
Customer requirements are the specific characteristics that the customers need from a product or
a service.
There can be two types of customer requirements:
1. Service Requirement
2. Output Requirement

Service Requirement:
Intangible thing or product that is not able to be touched but customer can feel the fulfillment.
There are elements in service requirement like on-time delivery, service with a smile, easy-
payment etc. It includes all aspects of how a customer expect to be treated while purchasing a
product and how easy the buying process goes.

Output Requirements:
Tangible thing or things that can be seen. Characteristic specifications that a consumer expects to
be fulfilled in the product. Costumer that will avail services as a product, then various service
requirements can take the form of output requirements. For example, if the consumer hires a
multi cab, then on-time arrival becomes an output requirement. Customer buys gadgets (phone
speaker), the specification like the loudness and clarity are the output requirements.

C. Market Size

Entrepreneur’s most critical task is to calculate the market size, and the potential value that
market has for their startup business. Market research will determine entrepreneur possible
customers in one locality.

What is Market Size?

Market size is like a size of arena where the entrepreneurs will play their business. It is the
approximate number of sellers and buyers in a particular market. Companies are interested in
knowing the market size before launching a new product or service in the area.

In determining the market size, entrepreneur will conduct a strategic marketing research
from reliable sources using the following method.
First step is to estimate the potential market – approximate number of customers that will
buy the product or avail your services.

Second step is to estimate the customers who probably dislike to buy your product or avail
the services.

Third step is for the entrepreneur to estimate the market share, that means plotting and
calculating of the competitor’s market share to determine the portion of the new venture.
Market size become the most important if you ever need to raise funding for your business.

MODULE 4
DATA COLLECTION is the most valuable tool of any type of research study. Inaccurate data
collection may cause mistakes and ultimately lead to invalid results.

TIPS in GATHERING DATA

• Organize collected data as soon as it is available
• Know what message you want to get across and then collect data that is relevant to the message
• Collect more data
• Create more data
• Regularly run experiments or collect data
• Challenge your assumptions
• Set reasonable expectations
• Take note of interesting or significant data

Three different data collection techniques –

SURVEY (Questionnaire)
INTERVIEW and
FOCUS GROUP DISCUSSION

SURVEYS are the most common way to gather primary research with the use of questionnaires
or interview schedule. These can be done via direct mail, over the phone, internet (e.g. Google)
or email, face-to-face or on Web (e.g. Skype or Viber).

When designing or constructing your own research questionnaire, remember the following
guidelines. (Edralin, 2016)
• Keep it simple as possible.
• Make sure it is clearly appealing and easy to read.
• Cluster or block related questions.
• Move from complex questions to more specific questions.
• Make sure questions are concise and easily understood.
• Avoid questions that are difficult to answer.
• Make sure any response scales used are consistent with categories that are mutually exclusive.

INTERVIEW is one of the most reliable and credible ways of getting relevant information from
target customers. It is typically done in personal between the researcher/entrepreneur and a
respondent where the researcher asks pertinent questions that will give significant pieces of
information about the problem that he will solve. The interview is also helpful even when the
business has already started because the customers’ feedback provides the entrepreneur a
glimpse of what the customers think about the business.

Interviews normally last from 15 to 40 minutes, but they can last longer, depending on the
participants’ interest in the topic.

In a structured interview, the researcher asks a standard set of questions and nothing more.
(Leedy and Ormrod, 2001)

• Personal interviews are the traditional method of conducting an interview. It allows the
researcher to establish relationship with potential participants and therefore gain their
cooperation. It generates highest response rates in survey research. They also allow the
researcher to clarify indefinite answers and when necessary, seek follow-up information.

• Telephone interviews are less expensive and less time consuming, but the disadvantages are
that the response rate is not as high as the face-to- face interview, but considerably higher than
the mailed questionnaire.

FOCUS GROUP DISCUSSION (FGD) - is an excellent method for generating and screening
ideas and concepts. It can be a moderated group interviews and brainstorming sessions that
provide information on user’s needs and behaviors. The following are considerations in the use
of focus group discussions in market research: • The length of the session is between 90 and 120
minutes.
• Usually, conduct focus groups discussion with 8 to 10 participants per group.
• Assign an expert moderator / facilitator who can manage group dynamics..
• Use a semi-structure or open-format discussion
• Strive for consistency in the group’s composition (for example, it may not be advisable to have
business customers and retail customers in the same focus group, their needs are very different)

What’s More Aside from the main basic groups of research methods (quantitative, qualitative
and mixed), there are different tools that can be used to collect data. Interviews can be done
either in personal or over the phone. Surveys/questionnaires can be paper or web based. Focus
Group Discussions can be moderated group interviews and brainstorming sessions that provide
information on user’s needs and behaviors.

Marketing Mix is a set of controllable and connected variables that a company gather to satisfy
a customer better than its competitor. It is also known as the “Ps” in marketing. Originally, there
were only 4Ps but the model has been continually modified until it became 7P’s. The original 4
P’s stands for product, place, price and promotion. Eventually, three elements have been added,
namely: people, packaging and positioning to comprise the 7 P’s.
The 7 P’s of Marketing Mix

1. PRODUCT
Marketing strategy typically starts with the product. Marketers can’t plan a distribution system or
set a price if they don’t know exactly what the product will be offered to the market.
Product refers to any goods or services that are produced to meet the consumers’ wants, tastes
and preferences. An example of goods includes tires, MP3 players, clothing and etc. Goods can
be categorized into business goods or consumer goods. A buyer of consumer goods may not have
thorough knowledge of the goods he buys and uses. An example of services includes hair salons
and accounting firms. Services can be divided into consumer services, such as hair styling or
professional services, such as engineering and accounting.

2. PLACE
Place represents the location where the buyer and seller exchange goods or services. It is also
called as the distribution channel. It can include any physical store as well as virtual stores or
online shops on the Internet.

3. PRICE
The price is a serious component of the marketing mix. What do you think is the meaning of a
Price?
In the narrowest sense, price is the value of money in exchange for a product or service.
Generally speaking, the price is the amount or value that a customer gives up to enjoy the
benefits of having or using a product or service. One example of a pricing strategy is the
penetration pricing. It is when the price charged for products and services is set artificially low in
order to gain market share. Once this is attained, the price can be higher than before. For
example, if you are going to open a
Beauty Salon, you need to set your prices lower than those of your competitors so that you can
penetrate the market. If you already have a good number of market share then you can slowly
increase your price.

4. PROMOTION
Promotion refers to the complete set of activities, which communicate the product, brand or
service to the user. The idea is to attract people to buy your product over others. Advertising,
Personal Selling, Sales Promotion, Direct Marketing, and Social Media are examples of
promotion.

5. PEOPLE
Your team, a staff that makes it happen for you, your audience, and your advertisers are the
people in marketing. This consists of each person who is involved in the product or service
whether directly or indirectly.
People are the ultimate marketing strategy. They sell and push the product. People are one of
the most important elements of the marketing mix today. This is because of the remarkable rise
of the services industry. Products are being sold through retail channels today. If the retail
channels are not handled with the right people, the product will not be sold. Services must be
first class nowadays. The people rendering the service must be competent and skilled enough so
that that the clients will patronize your service.
Therefore, the right people are essential in marketing mix in the current marketing scenario.

6. PACKAGING
Packaging is a silent hero in the marketing world. Packaging refers to the outside appearance of a
product and how it is presented to the customers. The best packaging should be attractive enough
and cost efficient for the customers. Packaging is highly functional. It is for protection,
containment, information, utility of use and promotion.

7. POSITIONING
When a company presents a product or service in a way that is different from the competitors,
they are said to be “positioning” it. Positioning refers to a process used by marketers to create an
image in the minds of a target market.
Solid positioning will allow a single product to attract different customers for not the same
reasons. For example, two people are interested in buying a phone; one wants a phone that is
cheaper in price and fashionable while the other buyer is looking for a phone that is durable and
has longer battery life and yet they buy the same exact phone.

Brand Name is a name, symbol, or other feature that distinguishes a seller's goods or services in
the marketplace. Your brand is one of your greatest assets because your brand is your customers'
over-all experience of your business. Brand strategy is a long-term design for the development of
a popular brand in order to achieve the goals and objectives. A well-defined brand strategy
shakes all parts of a business and is directly linked to customer needs, wants, emotions, and
competitive surroundings

Experts believe that a good brand can result in better loyalty for its customers, a better corporate
image and a more relevant identity.
As more customers continue to differentiate between emotional and experienced companies, a
brand may be the first step forward in your competition instead of price points and product
features. The question is, can you build a brand which truly talks to your audience?
Branding is a powerful and sustainable high-level marketing strategy used to create or
influence a brand.

Branding as a strategy to distinguish products and companies and to build economic value to
both customers and to brand owners, are described by Pickton and Broderick in 2001.

Commonly Used Branding Strategy

1) Purpose
"Every brand makes a promise. But in a market in which customer confidence is little and
budgetary observance is great, it’s not just making a promise that separates one brand from
another, but having a significant purpose," (Allen Adamson).
How can you define your business' purpose? According to Business Strategy Insider, purpose
can be viewed in two ways:
a. Functional. This way focuses on the assessments of success in terms of fast and profitable
reasons. For example the purpose of the business is to make money.
b. Intentional. This way focuses on fulfillment as it relates to the capability to generate money
and do well in the world.

2) Consistency
The significant of consistency is to avoid things that don’t relate to or improve your brand.
Consistency aids to brand recognition, which fuels customer loyalty.

3) Emotion
There should be an emotional voice, whispering "Buy me". This means you allow the customers
have chance to feel that they are part of your brand.
You should find ways to connect more deeply and emotionally with your customers. Make them
feel part of the family and use emotion to build relationships and promote brand loyalty.

4) Flexibility
Marketers should remain flexible to in this rapidly changing world. Consistency targets at setting
the standard for your brand, flexibility allows you to adjust and differentiate your approach from
your competition.
According to Kevin Budelmann, "Effective identity programs require sufficient consistency to be
identifiable, but sufficient variation to keep things fresh and human" so if your old tactics don't
work anymore, don't be afraid to change. It doesn’t mean it worked in the past it may still work
now.

5) Employee Involvement
It is equally important for your employees to be well versed in how they communicate with
customers and represent the brand of your product

6) Loyalty
Loyalty is an important part of brand strategy. At the end of the day, the emphasis on a positive
relationship between you and your existing customers sets the tone for what potential customers
can expect from doing business with you.

7) Competitive Awareness
Do not be frightened of competition. Take it as a challenge to improve your branding strategy
and craft a better value in your brand.